Malta Business Bureau pushes for permanent EU carbon tax break on island shipping
The MBB is lobbying Brussels for a permanent 50% exemption from EU shipping emissions taxes, warning the current rules raise costs for Maltese businesses and consumers.
The Malta Business Bureau has called for a permanent 50% reduction in emissions-allowance obligations on eligible maritime routes serving small EU islands, arguing that Malta’s dependence on imported goods requires a more proportionate approach to carbon pricing.
The proposal was presented during a Brussels visit by a 19-member business delegation, with freight costs and island connectivity central to its discussions with European policymakers.
MBB chief executive Mario Xuereb said approximately 70% of Malta’s imports arrive on the Italy–Malta route. He argued that carbon costs on essential shipping connections can pass through freight charges to businesses and households.
The bureau says it supports decarbonisation but wants the system to reflect the limited transport alternatives available to island economies.
Its recommendations cover ro-ro cargo vessels, combined passenger-and-freight ships and container ships travelling between EU ports and islands smaller than 10,000 square kilometres without a road or rail connection to the mainland.
The MBB also proposed adjustments reflecting the cargo carried on return voyages, highlighting the imbalance between inbound freight and less heavily loaded outward journeys.
For aviation, it is seeking free allowances covering 50% of the surrender obligations for eligible island flights, alongside stronger support for sustainable aviation fuel.
A separate concern is Malta Freeport’s competitiveness. The bureau supports safeguards intended to discourage transhipment activity from shifting to nearby non-EU ports to reduce exposure to carbon costs.
The shipping and aviation relief sought by the delegation remains a policy proposal. The visit did not secure a new exemption or establish a reduction in freight charges.
For importers, exporters and transport operators, the eventual outcome will depend on the legislation adopted, the routes covered and the way carriers reflect allowance costs in their prices.